Abolishing door-to-door selling — and the custody fee (1996)

A principle that began as an accident

The rejection of door-to-door selling was not a reform led by conviction. Around 1986 the firm compressed its commission-based pay; five of its ace sales managers left, important customers left with them, and the sales force was wiped out. What remained was newspaper advertising, and the trade press of the day wrote plainly that there was nothing positive in the reason for it. Matsui then recast the method he had adopted to clean up the mess into a principle: that the necessity of meeting customers face to face is nothing more than an assumption on the supply side. The means came first; the argument was fitted afterwards.

The range within which he could cut prices was confined to the gaps where regulation was loose. Brokerage commissions on equities remained fixed for trades under ¥1 billion, and all Matsui could move was the custody fee and the over-the-counter issues that had been free to begin with. Matsui himself conceded in 1995 that, with so little added value, the majors would weed his firm out once deregulation came. Customers, for their part, could not use the shop at all unless they were able to take on the whole investment judgement themselves. That a principle born of an accident broke the conventions of the industry, and that the same principle was still being sheltered by the slowness of the system, were true at the same time.